I know I don’t write about prescription drug prices too often. Luckily, my patients take so few medications that it’s rarely an issue for them. But for people who genuinely need certain prescription drugs in order to live, it can be a problem — a very serious one at that.
It’s a sad fact. But there are people living in this country who have to choose between buying groceries and buying the prescription drugs they need. And if you’re wondering how the heck this could possibly happen in one of the wealthiest countries in the world, allow me to explain…
I’ll hold up two popular drugs prescribed for rheumatoid arthritis (RA) — Humira and Enbrel — as examples. Because their prices have rocketed by more than 70 percent over the last three years alone. And that’s despite a hefty bit of competition on the market.
In fact, roughly a dozen new RA drugs have been introduced since the very first treatment debuted at a price tag of $10,000 per year. But if you think that’s expensive, get this: Instead of dropping as new alternatives become available, the way you might expect, that price has quadrupled — to more than $40,000 per year today.
Clearly, market competition isn’t doing a thing to drive down the prices of these brand-name specialty drugs. And if you guessed that the industry itself was responsible for preserving this lucrative status quo, then — sadly and predictably — you’d be correct.
As it stands, Humira is the world’s biggest moneymaking drug. AbbVie, its manufacturer, will likely rake in a hefty $17 billion from sales just this year. In fact, when you include the drugs Enbrel and Amgen, RA medications hold three spots on the top ten list of moneymaking drugs.
That’s pretty strong representation for drugs designed to treat a disease that only affects one percent of the population globally, wouldn’t you agree?
Granted, some RA drugs are also prescribed for other conditions — like psoriasis (and psoriatic arthritis) and Crohn’s disease. But even so, something about this situation seems amiss. The bottom line: prices can’t stay this high without a lot of help from the entire supply chain.
And as usual, desperate patients are footing the bill while the rest of the industry gets rich.
In fact, pharmacy benefit managers (PBMs) — the middle-men responsible for overseeing drug plans, processing prescriptions, and negotiating prices — make more money when they choose higher priced drugs. Because unlike the patient, they often get rebates.
These rebates are usually a percentage of the wholesale cost. So when drugmakers mark up their sticker prices, PBMs get a bigger cut, too. And they share it with the insurers and employers who hire them. (In other cases, the rebates go directly into the pockets of the medical clinics or doctors handing out the treatments.)
It’s not hard to see how this practice drowns out competition and keeps prices sky-high.
They won’t tell you how much they’re making off of this arrangement, of course, But research shows that rebate and discount payments to PBMs, insurers, and the U.S. government shot up by nearly 60 percent — that’s a whopping $106 billion between 2013 and 2015.
But you know who never saw even a sliver of this pie? The patients paying for the treatment.
They didn’t have a choice in the matter. And it’s not because cheaper versions aren’t out there, either. There are a number of lower-cost RA drugs just like Humira, Enbrel, and Remicade. But while the FDA has approved them, they haven’t yet made it past the courtroom due to patent disputes.
Is that any way to ensure proper health care for Americans — by allowing Big Pharma to work the legal system and deprive patients of options?
It’s a real shame — but this is what goes on behind the curtain of our healthcare system. And as long as big business continues to call the shots and profit continues to reign supreme, there’s no reason to expect it to change.
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